Research Joint Ventures Cartelization with Asymmetric R&D Spillovers

Abstract

The paper analyzes the profitability of R&D cooperation under asymmetric spillovers. It is shown that a firm prefers R&D competition to RJV cartelization when its own spillover rate is low and the spillover rate of its competitor is high. While it prefers R&D cartelization to RJV cartelization when the spillover rate of its competitor is sufficiently high. The equilibrium configuration is RJV cartelization for low spillover asymmetries, R&D competition for intermediate asymmetries, and R&D cartelization for high asymmetries.Asymmetric Spillovers